Richard The Lionhearted

A Billionaire Who Dresses In Drag, Pilots Balloons

2000Jan 03

CorrespondentCBSNews.com staff CBSNews.com staff

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Although relatively unknown in America, Richard Branson is one of the most recognized faces in Britain. A 49-year-old tycoon and adventurer known to some as "Richard the Lionhearted," he runs a multibillion dollar financial empire called the Virgin Group, which has interests in everything from airlines to record stores.

When 60 Minutes Correspondent Steve Kroft first profiled Branson seven years ago, the charismatic entrepreneur was just becoming well known. This year Kroft revisited Branson to find out how the billionaire had changed.

In a country where business and society are run by knighted gentlemen with inherited money, Richard Branson stands out.

He is a certified British eccentric, a slightly awkward, inarticulate party animal, a shameless promoter, a risk taker and maybe even a hustler. For a time he not only owned the world record for the fastest transatlantic crossing by boat; he now owns the third-largest private corporation in Britain, which he runs without an office, a desk - or a high school education.

He can't even read a balance sheet.

To get a sense of the breadth of Branson's businesses, check out the Web site for The Virgin Group.

"I always get muddled up the difference between gross and net sales," he said. "If I could read a balance sheet and I relied on accountants, I wouldn't have done anything in life."

But underneath his relaxed manner, Branson is intense and competitive. During the weekend cricket matches at his estate, he plays to win.

The self-reliance and eccentricity comes from his mother, a former glider pilot and airhostess who, although she's older than 60, still plays tennis with the same fight that her son plays cricket.

When Branson was only 4, his mother dropped him in an open field miles from his grandfather's farm to see if he could find his way back. And with some help from a neighbor, he did.

"I think it taught him something," she said. "It made him stand on his own feet. I wanted him to sort of grow up independently and bravely. You've got to take some risks in life."

Branson quit school at 15 to publish a counterculture magazine called The Student, which he used to sell discount records by mail. He then began selling records out of a London shop, the forerunner to one of the largest retail chains in Europe. He called the shop Virgin Records.

The name, he says, was a reflection of his teen-age state of mind. "I was 16, inexperienced at usiness and at other things, too, and it seemed appropriate," he said. "I suppose at the time there was the slightly outrageousness about it."

That outrageousness would become his trademark. With the retail profits from the music store, he bought an old manor house, which he turned into a recording studio. His first artist was someone who had been hanging around the manor working on an instrumental composition that no one else wanted; $5 million copies were sold of the recording of Mike Oldfield's Tubular Bells.

In the years after, Branson signed Phil Collins, Boy George and the Culture Club, Peter Gabriel, The Rolling Stones and Janet Jackson. The corporate headquarters was a London houseboat.

From there, Branson branched out into music videos and publishing. And by the end of the 1980s, he had a successful, hip empire. Then another entertainment giant, Thorn EMI, offered Branson a billion dollars for Branson's record company. He accepted, in part to raise money for his airline, which at that point was struggling.

Branson never had any intention to build a billion dollar business, he said. He added that he thinks the people that build such businesses are the people "just enjoying life and doing what intrigues and fascinates them."

CBS

From the time he was young, Richard Branson's mother encouraged him to take risks.

The entrepreneur then focused on Virgin Atlantic Airways, which he started with one jumbo jet in 1984. He wanted to bring the entertainment business to flying, matching his competitors' prices on profitable transoceanic flights, but offering all sorts of extras including an onboard masseuse, door-to-door limousine service and personal videos.

He claimed he was so successful that British Airways tried to put him out of business by stealing passengers and waging a dirty tricks campaign.

Branson became interested in the business because it seemed challenging, he said. "One of the reasons we're in the airline business is I was told it couldn't be done and that it was impossible for a small airline ever to survive."

To get publicity for his ventures and indulge his own sense of adventure, Branson began another pursuit that would risk not only his fortune but his life. In an attempt to cross the Atlantic Ocean in a hot-air balloon, he formed a partnership with world- renowned balloonist Per Lindstrom. Five people had died trying to accomplish the feat.

"The idea of doing something that man has never done before has a great appeal," he said.

In 1990 Branson and Lindstrom succeeded; the following year they undertok a much more dangerous journey: a 6,000-mile balloon trek across the Pacific. It nearly killed them. After accidentally jettisoning half their fuel, they didn't have enough to finish their trip and little hope of being rescued in the water.

To survive, they took their balloon up into the jet stream, which shot them thousands of miles off course. They crossed the Canadian Rockies in a blinding snowstorm and crash landed on a frozen lake bed in the Northwest Territories, with no maps and no clue where they were.

"A rescue plane came looking for us and I radioed up to it, 'We're on a lake by some trees.'" Branson recalled. "The rescue plane radioed back 'Mr. Branson, there are 300,000 lakes in this area and an awful lots of trees.'"

But Branson's luck held, and after six and a half hours they were rescued. Afterward, he promised his wife and children that his adventures were over.

When he returned from the last balloon trip, he expected a congratulatory lunch with his father. Instead, he got his very first lecture. His father told him to grow up. Branson said he doesn't plan to follow the advice.

A lot has happened to Branson in eight years. In 1992 Virgin Atlantic Airways had eight planes and was struggling to survive. Today it is the third largest European carrier across the Atlantic with 45 planes and is one of the most profitable airlines in the world.

Last month, he sold 49 percent of Virgin Atlantic Airways to Singapore Airlines, for $968 million. He says he plans to use this money to make a splash in the cellular telephone and Internet markets.

The Virgin Group now includes more than 200 different businesses and is the largest privately held group of companies in Britain.

Branson is the ninth-richest man in Britain and has successfully combined fun and corporate capitalism. His Virgin Megastores have revolutionized the way records and CDs are sold; the New York store has become a major tourist attraction and makes more than a million dollars a week.

But in many ways Branson hasn't changed. He says that he has still not matured, and doesn't want to. He is still outrageous. To publicize Virgin Bride, a one-stop boutique for brides-to-be, he shaved his beard and mustache, and donned a bridal gown.

The genesis of that business is quintessential Branson. "A Virgin stewardess came along and saw me one day and said, 'Why couldn't they go one-stop bridal shopping, where everything could be organized for you,'" he remembers. "And I said, 'Why don't you set it up, and the name sounds great. Let's give it go.' And it's really been very successful."

Less successful was Virgin Cola. The venture fizzled in less than a year - though Virgin is going to give it another try. Some of his other ventures have been more profitablable, including a railroad, a bank, a rugby team, a chain of cosmetic stores and a modeling agency.

Since 1992, he has made three attempts to pilot a balloon around the world. All three failed. In March 1999, another team made it.

So Branson shifted his goals, to space travel. He wants to send up a test flight by next year. His plan calls for a rocket that can be used over and over. The cost for the space tourist: $50,000 a person.

"Our other dream would be to build a Virgin Hotel in space and so maybe they could stay up there for a week, while the rocket goes up and gets more passengers," Branson says. The project could cost as much as $100 million.

Branson scoffs at those who say he is being unrealistic: "When we went into the airline business from the record business 15 years ago, people thought we were absolutely mad," he says. "And we have built one of the most profitable businesses in the world."

He adds that people think that anybody looking at the space business "must be a little bit mad, but I suspect that 15 years from now this business could be a very profitable business as well."